Archive for November 19th, 2009

The mystery of the sudden fall from grace of a leading bolibourgeois magnate

November 19, 2009

(In Spanish here)

(Rayma: Do you feel like eating another bank?)

It is a story typical of the revolution and we have now seen it a few times: The sudden rise of an unknown businessman in the last few years, protected by invisible forces and wheeling and dealing without any limitation. And just when you begin asking yourself whether there is a limit, the new bolibourgeois magnate is stopped on his tracks by an equally invisible hand and without explanation.

Yesterday, Descifrado reported that Conatel, the telecom regulator, had not allowed the sale of cellular operator to Ricardo Fernandez Barrueco. Then today the Superintendency of Banks asked that the sale of Banco Canarias to the same man be reverted. And then today, the Government officially (and earlier unofficially) announces the intervention of Fernandez’ four banks Bolivar, Banpro, Confederado and Canarias.

Fernandez Barrueco’s rise was as sudden as his apparent demise. According to Caracas Gringo, he has seen documents before the purchase of the these banks which gave him an audited value of US$ 1.6 billion in 2005. Then, he appears purchasing a bunch of banks, not precisely the darlings of the banking system. And it is not clear how he purchased them.But nothing happened.

Then, a few weeks ago, he purchases Banco Canarias for an absurd amount and Digitel for a high, but not a totally absurd price.

And through it all, everyone wondered where the money was coming from. It was clear that the banks were being purchased with depositors money, but how about Digitel? The company was reportedly being bought for US$ 700 million, how could someone amass so much money so fast? Hey! This is supposed to be a Socialist, not a Capitalist revolution.

And even then, why make so much noise? Why the need to spend the money so fast? Why buy into a sector where Chavez, the ultimate decision maker, had an interest in? Why buy a bunch of mediocre banks, rather than a good one all at once? Why buy Digitel which competes with CANTV?

And there was lots of speculation: They would one day flip the banks to the Government. They would flip them to someone else. They were planning for AH (After Hugo). They were accumulating wealth for the “process”. They were representing people close to Hugo. Take your pick.

And Fernandez was not alone, other groups were creating similar empires. Perhaps smaller ones. Or they started later. But Fernandez has (had?) at least three competitors in all of this. Descifrado claims all of them will be blocked. They are all in the doghouse. The problem is source of funds, where was all this money coming from? Have to see it to believe it. Maybe this is simply envy. A fight between groups. Bolivarian Mafia Wars in Facebook terminology.

To me, it is all very mysterious and I write about it today, because I don’t think it will be clearer three months from now. Like Fernandez’ rise, his fall is a story that will remain veiled in mystery and secrecy.